Sometimes the best news for your business is bad news for your competitor. ARS Pharmaceuticals Inc. (SPRY) got exactly that kind of gift Friday, with shares jumping nearly 19% after regulators threw cold water on a rival's plans to enter the needle-free epinephrine market.
The FDA identified deficiencies in Aquestive Therapeutics Inc. (AQST)'s New Drug Application for Anaphylm that prevent the agency from discussing labeling and post-marketing commitments right now. Translation: Aquestive's application has problems serious enough that regulators aren't even ready to talk about the final details yet.
The FDA was careful to note this doesn't represent a final decision and the review continues, but for ARS, the delay is music to their ears.
William Blair analyst Lachlan Hanbury-Brown captured the mood in an investor note Friday: "While not entirely unexpected, we believe this news is a positive for shares in ARS, as it likely removes (or at least delays) the potential for a near-term competitor in the needle-free epinephrine space, which has been an overhang on the stock."
The analyst pointed out that while he's waiting to see the final review decision and any potential path forward for Aquestive, this development leaves neffy as the only needle-free epinephrine device available for treating severe allergic reactions. That gives ARS precious time to cement neffy's position as the go-to needle-free option before anyone else shows up to the party.
A Fight That's Been Brewing
This isn't exactly a surprise given the corporate drama that's been unfolding. Back in September, ARS Pharmaceuticals filed a citizen petition essentially asking the FDA to pump the brakes on Aquestive's experimental epinephrine treatment. Their concerns? Safety, dosing, and real-world usability issues.
The petition specifically targeted AQST-109, a sublingual film branded as Anaphylm. ARS argued that existing data don't adequately demonstrate the drug's safety or effectiveness for anaphylaxis patients. If the FDA decided to approve it anyway, ARS requested a boxed warning highlighting potential cardiovascular risks.
The company also pushed for additional studies to address usability and pharmacological concerns before approval. Now, months later, the FDA's own review has hit similar snags.
Clear Runway Ahead
William Blair continues to see blockbuster potential for neffy and notes that ARS is well funded to support the commercial launch. The firm maintains its Outperform rating on the stock.
For investors who've watched competitive concerns weigh on SPRY shares, Friday's news suggests the company has more breathing room than previously expected to build out its market position.
Price Action: ARS Pharmaceuticals shares traded up 18.86% to $13.01 at the time of publication Friday.
